EMI could save up to £200 million a year under proposals to be outlined today by Guy Hands, who runs Terra Firma, the private equity company.

Mr Hands is expected to tell staff this morning that he will focus on A&R, centralise the group’s functions and cut at least 1,500 jobs. He plans to reduce expenses by merging the music labels that run individual sales and marketing units.

Terra Firma is also understood to have secured about £250 million of extra equity from investors.

Mr Hands’s plans have sparked a revolt among some of the company’s artists, including Robbie Williams, whose manager, Tim Clark, said that Williams may withhold his next album in protest.

Last night, it also emerged that the Verve have joined Williams and Coldplay in threatening to withhold their next album.

A group of dissatisfied managers, led by Jazz Summers, who represents the Verve and Snow Patrol, are expected to meet Mr Hands today.

Mr Hands is believed to be particularly keen to retain Williams. An £80 million deal signed in 2002 gives EMI a share of the performer’s live and merchandise earnings. The deal protects the company from a downturn in his CD sales.

Mr Hands also plans to introduce a new incentive payment structure that will focus on rewarding artists who are commercially successful instead of paying huge advances.

The cutbacks will focus on recorded music, which is less profitable than publishing. Mr Hands wants to exploit further the back catalogue at EMI, the label behind Kylie Minogue, Norah Jones and the Beatles, by digitising more recordings.

He also believes that leading bands can attract corporate sponsors in the same way that football teams do.

Coldplay’s manager said that the band was considering its options after Tony Wadsworth, EMI’s head of music, left last week after more than 25 years at the company. Mr Wadsworth, the chairman and chief executive of EMI Music UK and Ireland, was known as the “artists’ ally”.

EMI’s share of the album market last year slumped from 16 per cent to 9 per cent. Universal Music, its rival, secured almost 50 per cent of sales.

Terra Firma acquired EMI for £3.2 billion in August. The deal ended seven years of attempts by EMI and Warner Music Group to buy each other.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts